Gold is trading lower and lost nearly $15 from yesterday’s high of $1306 on easing geopolitical tension.
The major three factors that drive gold prices
US dollar Index: Bearish. DXY is trading in narrow range between 97.49 and 96.87 for past 10 trading days. The index has formed a double bottom around 96.85 and is currently trading around 96.97. The near term support is around 96.79 and any close below targets 96.36/95.75.(positive for gold).
USD/JPY: Strong . USD/JPY has recovered sharply after showing a minor decline below 300-day EMA. The near term resistance is around 112 and break above targets 112.50/113.Negative for gold.
US 10 year yield : US 10 year yield has shown a minor jump on better than expected US PPI data.The near term resistance is around 2.557% and any break above targets 2.609%/2.689%. The yield has been trading weak for past two months and lost nearly 25% from high of 3.25%.It is currently trading around 2.524%. Positive for Gold.
US 2 year yield: It is trading around 2.364%. The spread between US 10 year and 2 year has declined to 15bpbs from 30 basis point. The spread between 3 month and 10- year yield inversion has reversed (US 10 year yield trading above US 3 month).
Gold technical
On the higher side, near term resistance is around $1312 and any convincing break above targets $1316/$1324. The yellow metal should break above $1324 for further bullishness.
The near term support is around $1280 and any convincing below will drag the commodity down till $1269/$1260.
It is good to sell on rallies around $1295-97 with SL around $1304 for the TP of $1280.


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